tv Tavis Smiley WHUT April 12, 2010 8:30am-9:00am EDT
tavis: good evening from los angeles, i'm tavis smiley. first up tonight, a conversation with the man who blew the whistle on bernie madoff, harry markopolos. after a career as an security industry executive, he became a freelance fraud investigator and uncovered the ponzi scheme run by bernie madoff. his book is called "no one would listen." also tonight, "ncis" star mark harmon is here. the cbs series is now in its seventh season on cbs. it has become one of the most watched shows on television. we're glad you joined us. whistleblower harry markopolos and actor mark harmon coming up right now. >> there are so many things that wal-mart is looking forward to doing, like helping people live better, but mostly we're looking forward to building stronger communities and relationships.
because of your help, the best is yet to come. >> nationwide insurance proudly supports tavis smiley. tavis and nationwide insurance, working to improve financial literacy and the economic empowerment that comes with it. >> nationwide is on your side. >> and by contributions to your pbs station from viewers like you. thank you. [captioning made possible by kcet public television] tavis: harry markopolos is a former securities executive whose own investigatorive worked uncovered the ponzi scheme perpetrated by bernie madoff. his book is called "no one would listen," a true financial thriller. he joins us tonight from boston. harry, good to have you on this
program. >> thank you for having me. tavis: having gone through the text, i understand it, for those who know the story, they understand why you would call the book "no one would listen," for those who don't know the back story on what you did to uncover bernie madoff's scandal, you called the book "no one would listen" why? >> because we had an 8 1/2 year journey, my team and i we crossed fourth continents. we turned them in repeatedly to the s.e.c. i never let the s.e.c. know i had a team tracking in the field tracking madoff. it was too dangerous of a case. tavis: when you say too dangerous, true that you slept with a gun sometimes because you thought that someone was going to get on to you and maybe harm you? >> after june 2002 when i went to europe and i saw the offshore nature of the funds, funds and i knew that madoff at that time, it was pretty clear to me, he was stealing from
organized crime. if he was doing that, he had to be criminally insane or an organized crime boss himself. i wasn't sure which. from that point on, i carried a gun and i checked for bombs every time i got into my vehicle. tavis: how did you do the work that the s.e.c. is supposed to be doing? >> well, they had a $1 billion plus budget. they had 3,500 people busy not doing their jobs. they seemed to be protecting industry and being captive to it. they were weren't trained in finance or mathematics. it was up to our team. it was important to us. if we didn't do it, then no one would. tavis: it was important why? there was some competition here, yes? >> there was. in 2000 when we first discovered by madoff, i was fantasticed by my bosss to compete with madoff. i knew it was clearly impossible. it wasn't fair. it's hard to compete against somebody who types his numbers into a computer every month and they're all false returns. you can't compete with perfection. for the first 2 1/2 years, he
was definitely a competitor, actually for the first four years. after i left the industry in august of 2004, after that, it was because it was important to us to stop him. >> so your boss comes to you, here is how this story really begins as you said a moment ago. your boss comes to you, wants you to compete with bernie madoff because he can't figure out how bernie is making money that y'all ain't making. he wants you to compete and beat bernie madoff. you dig into how well he is doing. when do you come to figure out that you can't compete with this guy because he is cheating? >> that took about five minutes. i read his strategy description. just from the holes in that description, it appeared that madoff would only have to pick stocks that went up or stayed the sales. he couldn't afford to pick stocks that went down. that was the first thing i spotted. that was 30 seconds in. the second thing was the performance line went up at a 45-degree angle. the markets can go up, down, or stay the same. his returns only went in one direction, up. that was clearly impossible.
the third thing and that probably took a couple more minutes. i looked at his monthly returns. over 96% of his months were positive. that would be akin to a major league baseball baseball player batting .960. you would suspect cheating immediately and so we did. tavis: i don't mean to chagrin or to make light of obviously your intellect and your brilliance at looking at numbers. i'm still trying to figure out how what occurred to you in seven minutes had not occurred to the s.e.c., anybody making money with bernie madoff or quite frankly, anybody else in this large circle, how did all of this go unseen by everybody else and you picked up on some trends here in five to seven minutes? >> the theater funds, he had about 339 of these companies called theater funds that were feeding him new victims. they were getting paid to look the other way. they never did any of the due diligence checks that they said they were doing. they never verified the assets.
they never checked into the strategy. they never really investigated. the reason was they suspected that madoff was a fraud, but they suspected that he was cheating his broker dealer clients, his legitimate clients because madoff was trading 5% to 10% of the daily stock exchange volume in the united states, they were assuming that he was front running those clients and stealing returns from them and delivering those returns to the hedge fund clients illegally. so they didn't want to ask any questions. they assumed that madoff was a good crook. he was their crook. they didn't realize that a good crook would cheat everybody including them. tavis: so the answer here is that it wasn't that you were the only one who figured this out, but the greed on their part made them look the other way? >> they were blinded by greed. they didn't want to ask questions because they were afraid of the answers they were going to receive, so they thought it was best not to know. madoff was making them rich. he was giving them well over 90% of the total fees from the scheme. that was his brilliance. he took the smallest piece for himself. that's what kept the scheme going for so long.
that's why it got so big. tavis: how many times did you reach out to the s.e.c. before they actually pay attention to your filings? >> too many to count. there was five major submissions, many minor ones along the way. it was repeated over an 8 1/2-year period and i gave them the information. they looked at it and didn't comprehend it. i put it in the back of my book and i talk to readers. they don't have any mathematical backgrounds or finance backgrounds. they understood that there was something fishy going on that was easy to spot. tavis: so it seems to me, now that bernie madoff is in jail, that clearly a lot of attention, most of the attention has been focused on him. what say you about where that spotlight really ought to shine beyond this single guy, to your point, he couldn't do all this by himself. >> well, he didn't. he had a lot of help. he had 339 different companies around the globe helping him. they were in 40 different countries. he was very big in europe, certainly big in latin america,
certainly big in north america. his next final frontier would have been ace asia. he had a couple outposts. a few more years, the asians would become big victims. they were lucky and escaped. there were hundreds of people, if not thousands that knew madoff was a fraud. they need to be brought to justice. most of the perpetrators overseas will not be brought to justice and very few in north america will be brought to justice. i don't think the government has the resources to do this case and bring everybody to the bar of justice they need to. tavis: so when you suggest that persons who read your book as you have been touring around the country, understand the clear english, the clear language in which you right, that the s.e.c. should have understood if everyday folk can figure that out, do the victims, a tough question for some people to swallow, but do the victims here have any responsibility in knowing or having some idea that with a line that only goes straight up that something was wrong here, something was a little fishy
here? >> it was just a well designed scam that i don't think a normal victim would have any chance against madoff. they left that up to the professionals and the professionals clearly fell down on the job. he had such good lies, such a great reputation in the industry. he owned a broker dealer firm. it was prosperous. he didn't need to steal. an individual investor if they weren't from the finance industry would be able to figure that out. for the professional investors in those feeder fund companies that were supposed to be market professionals, they have no excuse. tavis: a want to stay on this point here because i want to talk -- this is important to me because i think this is something that is informative and instructive for all of us, even those of us that didn't have the big money that you had to have to invest with bernie madoff. the question again is if you're with a firm and the line always goes up, it never dips, it never goes down, it never levels, what ought the everyday investor, the average american,
take from that line always going up? >> there are two possible conclusions you can reach as an investor. the first one is that you're about to invest or have invested in something that's undergoing a bubble. it's going up at a rapid clip. you're seeing the upside. the downside is going to come. you're going to get wiped out soon. get out. second is it's a ponzi scheme. for the individual investors who did go with madoff and invested 100% of their assets, they forgot, diversify, diversify, diversify. don't put all of your eggs in one basket. tavis: bernie madoff has gotten all kinds of negative press. do you think the ponzi schemes are more often that we hear about, even though they're not the size of the bernie madoff scheme? >> now you're hearing about them. they're coming to the attention of the press because people lack confidence. investors are certainly pulling money and the schemes rely on a
constant inflow of new investors. without that, they collapse. you have been reading about so many collapsed ponzi schemes. the other factor is that the s.e.c. now finally knows what to look for in a ponzi scheme and they prioritize attacking ponzi schemes whenever they find them. they're hard to find because ponzi schemers don't exactly register with the s.e.c. they're off the books. they're not registered anywhere. they really need tipsters to come into the s.e.c. and tell them where the ponzi operators are. tavis: what did you learn, harry, as a whistleblower? >> it's dangerous. you take career risks and in this case, certainly you take personal safety risks for you and your loved ones and for your team members and their loved ones. you have to be careful when you blow the whistle. you can't do it too loudly or publicly, if you do, you risk harm. most whistleblower stories ended tragically. the families end up suffering tremendous economic hardship. you have to be very careful.
you have to have good attorneys and thinking three steps ahead of the bad guys. tavis: was it worth it? >> if you ask his team and that if we would do it again, no, it was too dangerous. we are lucky to get to the other side of this case. most whistleblowers that i have talked to, they say the same thing. they wouldn't do it again. tavis: finally in the ice of that boss who wanted you to compete with bernie madoff, have you been vindicated? >> i don't feel any sense of elation or vindication. the press likes to write that, and i don't. the case had a tragic ending. the investigation by the team and i was successful. the case was in failure. we shout we should have ended it sooner. he shouldn't have been able to wipe out the thousands of families that he wiped out. i feel more remorse than anything else, remorse and a tremendous sense of anger. >> his name is harry markopolos. his book is called "no one would listen," a true financial
thriller. thanks for your work and coming on to share your story. >> thank you for having me. tavis: up next, actor mark harmon, stay with us. please welcome mark harmon back to this program. he stars on "ncis," which has become one of the most watched series on television. the shower airs tuesday nights at 8:00. here now a scene from "ncis." >> i need a lead. >> oh, really? because i found our killer's blood. how is that for a case cracker. guess where. no, really, like i want you to guess. >> on the knife. >> no. guess again. >> abby -- >> i found trace amounts inside the stab wounds of our latest victims. >> d.n.a. >> i read the d.n.a. through the database. there is nothing in the system. but guess what mcgee thought? >> abby, no more guessing. credit cards, he purchased a hunting knife. >> the murder weapon.
>> the point and spine of this matches the wound patterns of all five victims. tavis: you must know something that other folk on tv do not. you're in season seven. tavis: up against "american idol" no less. >> always have been. tavis: you're my man, first of all. >> you're my man. tavis: how do the heck to you survive seven seasons up against that? >> tavis, we concentrated on doing the work. that's the only thing that's in our control. i don't think any of us have been surprised by the success. it's odd that here in year seven we have had more success than ever before, but i also think it's earned success. and honestly earned, too, by the way. i think we have had changes and we have gotten better with those changes. we're talking about rocky carroll earlier and i think rocky coming to this cast has meant something for this cast as other changes have. so whether we're changing in
front of the camera, behind the camera, i guess the name is try to get better with the change. i think we have done that. tavis: i'm intreeged by the phrase "honestly earned." what do you mean by that? >> i think it's not unusual, it is unusual to find a place where people like their job as much as they do on this show. we have some writers who have written more than 25 episodes. it's unheard of in television, network television, certainly one-hour dramatic television. i can say the same for those people behind the camera as well as those in front of it. we have done 160 episodes and no one is phoning it in. it's about the work ethic. it's about appreciating the job you have and realizing that the job you have is rare and that they don't come around all the time and i think at some point this show will end like they all end. but for right now, there is not a person on this show that doesn't really enjoy what this
is and continue to work hard to try to keep it what it is, which is what we have always done. tavis: given that you have done this for seven seasons, when you start to move toward that place where you think the end is neither, will you know what that means? >> i don't know. i have never about there. on. from the beginning, i have never had an intent to run this or any other show into the ground. i would love to think that you had enough vision into the future to realize, you know what? it's time to take this on a drive it until its last breath. i don't think anybody intends to do that. but i just know that here 160 episodes in, this is a fun place to work. they're challenging us continually as actors and certainly it's important to keep this group together, these actors, these creative people and it's up to the network to know that. tavis: it's one thing to stand out against "american idol" and for that "american idol" is, it ain't something that everybody
wants to see. people do like choices and it's a beautiful thing. so i can see, even though it sounds weird, how you could stand out against a show like "american idol." the other question for me which i think is more interesting is how you stand out against other shows, other procedurals, other drums and there seem to be more than a few of these kinds of shows. >> i think luck has something to do with it, but i also think that -- no one has a crystal ball. you know up front that this show was always strong in character. it always had humor. that was something you recognized about it right off. and then you gather together this very talented and mixed cast that has changed. the cast has changed. and yet four people from that original group of seven still remains there. i think we have had changes. that's part of it. i think we manage both in front of the camera and behind the camera to get better with those
changes. i think that's odd. you and i were talking earlier about when change is going to happen and you know it's going to happen, you don'tlways -- you get scared a little bit. you don't always know that it's going to work out. we have been fortunate that way. we have also worked at it and worked hard at it. this group deserves it all and that gets back to the honesty part of it that we talked about earlier. last time i sat here and talked to you, we were working 150-hour weeks and there was no one complaining about that it's not that we're working any less hard now, we're more organized than we were and working less hour. tavis: it's not lost on me, nine who knows your background, your career, your life journey isn't surprised about this. you are as humble a guy as you meet. you always deflect when it comes to you. you really are into this team concept. for those who know your background, you played sports, of course. i get a sense as i talk to you over the years, it's more than just a statement. you believe in this team
concept. >> you know, listen. i appreciate the respect, but i actually don't know any other way to do it. i'm a team guy. when i was playing sports, my job was to get the ball to the guy who could do the most with it. that hasn't changed. i don't care about things like size of trailers and who is number one on the call sheet or getting the laugh. i care that the laugh comes and that we're all a part of that. and from the beginning here, i have jumped into this in my mind as a team effort and to work as a team together and from this it becomes this. that's what i understand. if that's working on this show, then give credit there, but it's to everyone, not to me. tavis: to your point now about sports. sport is all around us. this week we wrapped up march madness, we have baseball season underway now, the masters is underway. so sport always around us.
i think it was earl warren, the former chief justice from this state in fact that said when he woke up in the morning he read the sports pages first because it told of man's accomplishment rather than his detriment. i think that's still the case on most days, the sports pages can be pretty inspiring and encouraging which raises this question for me, giving your metaphor earlier. is there something you take from sport that you can use, that you apply in your acting? >> no one does it alone. no one does it alone. and no one is more important than anybody else. that has a lot to do with upbringing and what you really believe. i couldn't play this if i didn't believe it. i understand that part of it. i understand how to make that work. and i think this show is responsible to that, but i would like to think that most of the things i have done in my life are responsible to that and to that i give credit to my parents and the coaches i have
met and the background that in some cases was just plain luck. tavis: i don't know if you said this to me and i was intrigued by it. i wanted to ask you about this. one of the things you said that you like about this show is that the characters get to keep their secrets. did you say that? >> something like that. you made it sound much better than what i said. tavis: i just bastardized your quote. you know what i'm getting at here? >> i do. tavis: unpack that for me. >> that gets back to the honesty question. it's our taken audience a while to understand who these characters are. they were character strong in the beginning. if you had written some of these back stories in years one, two, three, in that area, i don't know if the audience would have cared. now their invested. now they care. now some of those storylines to
really define how these people became who they are, and also a continuing storyline in some aspects of what we do. we do all kinds of different shows on this show and some have continuing storylines that kind of link up each other and some have storylines that go 10 episodes back and bring someone back. and then we do stand-alone episodes as well. that's what i mean by storytelling. our audience deserves that and our characters warrant that and our writers give them that. if you then say, ok, here in year seven, our numbers are better than ever, that we're doing 20 million viewers a week, then you need to give them credit for that because that's the secret they keep. and our writers are terrific. we have been able to keep them together for a long time and hopefully we'll be able to keep them together for a few years to come yet. tavis: i ask this question not to cast aspersion on him or not, he is a personal friend.
jay leno was on this show and we know the controversy that erupted when jay moved to prime-time and bumped out of the way a prime-time drama and now he is back in late night and doing well. there was a conversation about these one-hour dramas and what the future of them were going to be in television. did we learn anything from that? >> well, i think we did. we all work for the boss. i work for the network. that's who i work for. jay works for the network. i think it's tremendous and give him credit for making all of those decisions of what his future is, but the truth is you know and i know it's not that clear. tavis: exactly. >> listen, i didn't look at it that way. i'm more concerned about the jobs. not your job or my job, the jobs of these people manning the cameras and the sound booms and that sort of thing. we got to find a way to make
more work here and keep more work here. that's my concern about this business. i'm really proud that for seven years there has been 270 people on the set of "ncis" and know they have a job to come back to every june. that's a responsibility no one there takes lightly. tavis: i keep thinking that in season seven, season eight, season nine, we're going to be like blown away. you're going to pull this mask off and underneath the white face is going to be a brother. that name, i still swear your character is a brother deep down inside it's a black man playing this character. i love that name. >> early on there was a moment where it changed for one script. i said oh, no, i love this name. that's part of the interesting thing for me. for me, really going back way back to the beginning, that name stopped me. was and what his name was, i stopped and i still stop. i'm proud of it and i like
playing him and he is fun. tavis: only you could play leroy jethro on the show "ncis." he does it well. you're one of the top shows on television opposite "idol." have a great rest of the season. that's our show for tonight. catch me on the weekends on pri, public radio international. you can access our webcast on our website. i'll see you back here next time on pbs. until then, good night from los angeles, thanks for watching and as always, keep the faith. >> for more information on today's show, visit tavis smiley at pbs.org. tavis: hi, i'm tavis smiley. join me next time with former "deadwood" star timothy olyphant on his new series "justified." that's next time. we'll see you then. >> there are so many things that wal-mart is looking forward to doing like helping people live better, but mostlbu
and relationships. because of your help, the best is yet to come. >> nationwide insurance proudly supports tavis smiley. tavis and nationwide insurance, working to improve financial literacy and the economic empowerment that comes with it. >> nationwide is on your side. >> and by contributions to your pbs station from viewers like you. thank you.